Thursday, July 31, 2008

Warehouse Court of Appeal decision in Commerce Commission's favour

8.58am The Court of Appeal has overturned the High Court's ruling allowing rival grocery firms to bid for The Warehouse[WHS] by Foodstuffs and Woolworths Australia.

The Commerce Commission case argued that if either Woolworths or Foodstuffs bought The Warehouse, it would result in a "substantial lessening of competition".

This was after the Commerce Commissions case was defeated in the High Court in 2007 and an appeal against that decision was lodged earlier this year.

Trading in The Warehouse shares was thin yesterday, July 30 (NZ time), and price movement was mildly upwards during intra day trading but finished flat, so no pre announcement indications could be gleaned from the markets.

The sale process began almost 2 years ago but has been stymied by the Commerce Commission due to their contention that a purchase of The Warehouse by either Foodstuffs or Woolworths would impact to the detriment of food consumers. The Warehouse, Foodstuffs and Woolworths all argue that The Warehouse food offerings are not significant or successful enough to warrant a Commerce Commission appeal

It is likely that Foodstuffs, Woolworths and The Warehouse will appeal the Court of Appeal's decision to the Supreme Court in Wellington.

The Warehouse @ Share Investor

Why did you buy that stock?[The Warehouse]
The Warehouse set for turbulent 2008
WHS Court of Appeal case could be dismissed next week
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

Disc I own WHS shares

c Share Investor 2008
& Cartoon Emmerson 2008

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